Benefits of a Commercial SIPP

Their are tax advantages by way of no capital gains tax to pay when using the fund to buy a commercial property.

If you own a business and decide to use the property assets as part of your retirement planning, you would pay rent directly into your own pension fund rather than a third party.

Should you sell a business property to your SIPP, you will avoid tax liabilities including any future gain on the property when it is sold.

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SIPP Transfers

Before transferring to a SIPP it is important to check whether the benefits, such as your tax-free cash entitlement, are comparable with those offered by your existing pension.

Many SIPP providers will now permit you to set up a lump sum transfer contribution from another pension for as little as £5,000, and while most traditional pensions limit investment choice to a short list of funds, normally run by the pension company’s own fund managers, a SIPP enables you to follow a more diverse investment approach.

You are eligible to contribute as much as you earn to pensions including a SIPP (effectively capped at £40,000 each tax year). For instance if you earn £40,000 a year you can contribute up to £50,000 gross (£40,000 net) into all your pension plans combined in the 2015/16 tax year.

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SIPP Investmens

You can typically choose from thousands of funds run by top managers as well as pick individual shares, bonds, gilts, unit trusts, investment trusts, exchange traded funds, cash and commercial property (but not private property). Also, you have more control over moving your money to another investment institution, rather than being tied if a fund under-performs.

Once invested in your pension the funds grow free of UK capital gains tax and income tax (tax deducted from dividends cannot be reclaimed).

Credencis – Financial Adviser Nottingham

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You Can Invest In

Cash and Deposit accounts (in any currency providing they are with a UK deposit taker)

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Views expressed by our author, are the personal views of the author alone, and are not intended in anyway to be construed as advice. They should only be used as guidance and are not necessarily suited to the personal circumstances of every individual in the UK. If you are interested in seeking advice further then please contact Credencis direct.